The Retail King Wal-Mart Essay

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Wal-Mart has quickly become the world's largest company with its one stop shopping convenience and low prices. There is no debating that Wal-Mart is a dominating force in the American and world economy. However, there is a clash between two different views of how Wal-Mart achieved this status. The defenders of Wal-Mart say that they are so successful because they are market savvy and make good economic decisions. The other side argues that Wal-Mart only became successful by killing off all their competition with their low prices. The only thing that matters to those that like the company is that they save consumers money through their low prices, but you cannot tell this to all the owners of smaller stores that Wal-Mart has put out of …show more content…

People complain that these low prices kill off all other competition, but the American economy is based on competition, making it hard to fault them for being one step ahead of their competitors. It is clear that Wal-Mart is a very market efficient company. They understand that a successful business must continually expand their market if they want to continue improving. They provide consumers with almost any good they could possibly need and are even expanding into banking and healthcare. They also have expanded overseas, often seeking cost advantages by buying finished goods and raw materials directly from foreign manufacturers, which allows them to sell their goods for less. Many will argue that this takes away money from suppliers here in America, but none can debate that this is a very successful tactic. Another reason they are so successful is their understanding of economies of scale. By increasing their size and production they can increase profits greatly. However, this is beginning to become an issue for them because they are growing too large for their own good. Eventually any growing company reaches a point where growing larger is basically impossible due to agency issues, which essentially means issues in the management of such a large group of people. A longtime supplier of the company said, "Their biggest danger is just managing size." Although this has begun to become an

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